OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE

 3500 DEFENSE PENTAGON

 WASHINGTON, DC 20301-3500

 

 

 SUSTAINMENT

MEMORANDUM FOR SUPPLY PROCESS REVIEW COMMITTEE

SUBJECT: Approved Defense Logistics Management Standards Change 1411A, Materiel Returns 

Without Original Purchase Orders (Supply Discrepancy Reporting) 

The Defense Logistics Management Standards change, as outlined in the attachment, is approved 

for implementation.

Addressees may direct questions to Ben Breen, e-mail: DEDSO.SDR@dla.mil. Others must 

contact their designated Process Review Committee representative available at 

https://www.dla.mil/Defense-Data-Standards/Committees/Contacts/. 

 Leigh E. Method, SES 

 Deputy Assistant Secretary of Defense 

 for Logistics

Attachments:

As stated

cc:

OUSD(C)

DLA J6DS
Attachment, ADC 1411A 

Page 1

Approved DefenseLogistics Management Standards Change 1411A

Materiel ReturnsWithout Original Purchase Orders

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Technical POC: Defense Logistics Agency (DLA), Logistics Operations, Steven 

Nace, 571-477-4194, Steven.Nace@dla.mil

b. Technical POC: DLA, Finance, Justin Morrison, 614-692-8858, 

Justin.Morrison@dla.mil

2. REASON FOR CHANGE:

a. Bottom Line Up-Front: This change provides financially audit compliant 

procedures for handling customer materiel return requests and the disposal of non-conforming 

items investigated for quality concerns when the original purchase order is unknown. There 

were no significant changes to this document after staffing. 

b. Background: 

(1) With the implementation of the credit/replacement changes for Supply 

Discrepancy Report (SDR) and Product Quality Deficiency Report (PQDR) in Approved 

Defense Logistics Management Standards (DLMS) Change (ADC) 1411, DLA has encountered 

unforeseen requests by reporting customers. In some rare instances, upon being informed that 

they will not be provided credit or replacement of SDR/PQDR related materiel when an original 

requisition document number cannot be obtained, some customers have requested that DLA 

return materiel back to the reporting activity at the completion of the investigation. The requests 

have prompted further questions within DLA regarding transportation costs, and in some cases, 

disposal costs. Over the last few months DLA has worked with the DoD Components to 

determine if revisions to the DLMS are required. 

(2) After consulting representatives from the Office of the Under Secretary of 

Defense Comptroller (OUSD(C)), Office of the Under Secretary of Defense Acquisition & 

Sustainment (OUSD(A&S)), Defense Enterprise Data Standards Office (DEDSO) and DLA 

Finance, it was determined that Action Activities would become non-audit compliant with the 

Treasury Financial Manual if funding either the transportation or disposal of materiel that could 

not be traced back to an original purchase order. 

3. CHANGE IN DETAIL:

a. Technical Details: SDR and PQDR Originator Activities must supply a constructed 

document number when the original document number is unknown per Reference 10.a. In 

situations where Originator Activity is requested to return materiel associated with the
Attachment, ADC 1411A 

Page 2

constructed document number to a storage activity or contractor to investigate discrepancies, the 

Originating Activity must inform the Action Activity at the time of request if they want the 

materiel returned at the completion of the investigation. Due to the inability to link a constructed

document number to a purchase order with the Action Activity, the use of Action Activity funds 

to pay for return shipping to the Originating Activity would not be audit compliant. 

b. Revised Transaction Flow: Not applicable.

4. IMPLEMENTATION TARGET: No mandatory programming modifications are required 

of Automated Information Systems (AIS) as part of this change. The change will be 

implemented immediately upon approval. 

5. TECHNICAL IMPACT:

a. Additions or Changes to Data Elements: No changes required.

b. Automated Information Systems (AIS): No impact.

c. Defense Automatic Addressing System (DAAS): No impact.

6. PUBLICATION/POLICY IMPACT:

a. Defense Logistics Manual (DLM) 4000.25: 

(1) DLM 4000.25, Volume 2, Chapter 17, Supply Discrepancy Reporting as shown 

in enclosure 1.

(2) DLM 4000.25, Volume 2, Chapter 24, Product Quality Deficiency Report as 

shown in enclosure 1.

(3) DLM 4000.25, Volume 2, Chapter 11, Materiel Returns, Redistribution of 

Assets, Directed Discrepant/Deficient Materiel Returns and Retrograde Returns as shown in 

enclosure 1. 

(4) DLM 4000.25, Volume 4, Chapter 4, Adjustment Procedures as shown in 

enclosure 2.

b. Non-DLM 4000.25 Publications: 

(1) DLA Instruction 4155.28, Enterprise Product Quality Deficiency Report 

(PQDR) Investigation and Restitution Process, March 11, 2022 

(2) DLA Enterprise Standard Operating Procedure (eSOP) 4155.28-001, Product 

Quality Deficiency Report (PQDR) Processing, April 21, 2023 
Attachment, ADC 1411A 

Page 2

(3) DLA eSOP 4155.28-003, Product Quality Deficiency Report (PQDR) Exhibit 

Return, February 10, 2021 

(4) DLA eSOP 4145.04-001, DLA Discrepancy Reporting Program – Supply 

Discrepancy Reports (SDRs) and Storage Quality Control Reports (SQCRs), November 8, 2021 

(5) DLA eSOP 4145.04-002, QUALITY NOTIFICATION (QN) SUPPLY 

DISCREPANCY REPORT (SDR), June 1, 2020 

7. ASSUMPTIONS: While there are no mandatory system programming requirements in 

support of this change, components may choose to program assistive functionality within any 

applicable AIS.

8. FINANCIAL IMPROVEMENT AND AUDIT REMEDIATION (FIAR), MATERIAL

WEAKNESS, AND AUDIT-RELATED INFORMATION: There are no known formal 

Notices of Findings and Recommendations (NFRs) for the specific scenarios described in this 

change. However, the process outlined in this document has been developed specifically to 

ensure that DoD’s compliance with FIAR and the Treasury Financial Manual.

a. Notices of Findings and Recommendations (NFR): Not applicable.

b. Corrective Action Plan (CAP) References: Not applicable.

c. Other FIAR, Material Weakness, and Audit-Related Information: Not 

applicable.

9. END-TO-END TESTING REQUIREMENTS: Not applicable.

10. REFERENCES:

a. Approved DLMS Change 1411, Discontinue Credit/Replacement for Constructed 

Document Numbers, April 1, 2022 

b. DLM 4000.25, Volume 2, Chapter 17, Supply Discrepancy Reporting

c. DLM 4000.25, Volume 2, Chapter 24, Product Quality Deficiency Report Program

d. DLM 4000.25, Volume 2, Chapter 11, Materiel Returns, Redistribution of Assets,

Directed Discrepant/Deficient Materiel Returns and Retrograde Returns

e. DLM 4000.25, Volume 4, Chapter 4, Adjustment Procedures
Attachment, ADC 1411A 

Page 4

11. PROPOSED DLMS CHANGE (PDC) 1411A RESPONSE/COMMENT RESOLUTION:

Component Response/Comment Disposition

1. ODASD (Logistics) No response. As noted by signed PDC. 

2. DAAS Concur without Comment. As noted. 

3. Army No response. DEDSO Response:

No response represents concurrence 

per PDC 1411A change memo.

4. Navy Concur without Comment. As noted. 

5. Marine Corps No response. DEDSO Response:

No response represents concurrence 

per PDC 1411A change memo.

6. Air Force Concur without Comment. As noted. 

7. DLA Concur without Comment. As noted. 

8. USTRANSCOM Abstain no impact to USTRANCOM As noted. 
Enclosure 1, ADC 1411A 

Page 1 

Enclosure 1 

Revised DLM 4000.25, Volume 2, Supply Standards and Procedures

Make the following changes to Volume 2. Additions are shown in red bold italics. Deletions 

are shown by double strikethrough text. 

A. Chapter 11, Materiel Returns, Redistribution of Assets, Directed Discrepant/Deficient 

Materiel Returns and Retrograde Returns

C11.1.6. Responsibility for Costs Incurred for Returned Materiel. 

U.S. Government activities returning materiel are cautioned that the returning activity 

may be held responsible for costs incurred by the receiving activity when discrepancies 

are reported using Supply Discrepancy Reporting (SDR) procedures (Chapter 17) and 

Product Quality Deficiency Reporting (PQDR) (Chapter 24) procedures. This 

includes returns made in violation of prescribed materiel returns procedures, returns 

exhibiting packaging discrepancies, and returns of reparable items unaccompanied by 

required technical data. Recoupment action by the ICP against the initiator may include 

all cost reimbursable actions performed by the receiving activity (e.g., return shipping 

costs, repackaging, marking, and disposal).

B. Chapter 17, Supply Discrepancy Reporting

(Preceding text not shown)

C17.3.4. Materiel Returns.

(Intervening text not shown)

C17.3.4.6. Requests to Returning Materiel Upon Completion of Investigations. 

The Originating Activity must inform the Action Activity at the time of submission 

whether they want the materiel returned at the completion of the investigation 

when submitting a SDR using a constructed requisition number. In situations 

where credit or replacement of materiel is not authorized due to the inability to 

locate the original requisition document, the Originating Activity will be liable for 

the return transportation costs.

C. Chapter 24, Product Quality Deficiency Report Supply Discrepancy Reporting

Ch24. Exhibit Request.

C24.4.2.5.2. Requests to Returning Materiel Upon Completion of

Investigations. The Originating Point must inform the Action Point at the time of 

submission whether they want the materiel returned at the completion of the 

investigation when submitting a PQDR using a constructed requisition number. 

In situations where credit or replacement of materiel is not authorized due to the 
Enclosure 1, ADC 1411A

Page 2

inability to locate the original requisition document, the Originating Point will be 

liable for the return transportation costs.
Enclosure 2, ADC 1411A 

Page 1

Enclosure 2 

Revised DLM 4000.25, Volume 4, Military Standard Billing System - Finance

Make the following changes to Volume 4, Chapter 4. Additions are shown in red bold italics. 

Deletions are shown by double strikethrough text. 

C4.10.2. Other Discrepancy Adjustment Rules

C4.10.2.1. Adjusting Discrepancy Reports. Requests for adjustments related 

to TDRs will be submitted only when the adjustment is not received, and more than 60 

calendar days have elapsed since the report was filed. Requests related to PQDRs, 

SDRs, and SQCRs should be timely, but must not be submitted until a minimum of 60 

calendar days have elapsed since receiving notification that the discrepancy is validated 

(i.e., that an adjustment is approved). When the promised adjustment for a discrepancy 

is contingent upon the return of materiel, the request will not be submitted until a 

minimum of 60 calendar days have elapsed since shipping the materiel with additional 

allowance for transportation time to the shipping activity. When a reply to a discrepancy 

report is not received, follow up as prescribed by DLMS DLM 4000.25, Volume 2, 

Chapter 17, or 21, or 24, as applicable.